Fortunately, Indians are very forgiving toward foreigners who aren't always aware of the etiquette of Indian culture. However, to help you avoid embarrassing mistakes, here are some things not to do in India.
1. Don't Wear Tight or Revealing Clothing
Indians adopt a very conservative standard of dress, particularly in rural areas. Western dress standards, including jeans on women, are now prevalent in major cities. However, to be decent, you should keep your legs covered. You'll rarely see a well-dressed Indian man wearing shorts, or an Indian woman wearing a skirt above the ankles (although the beaches of Goa and college students are common exceptions!). Sure, you can do it, and most likely no one will say anything. But first impressions count! There's a common perception in India that foreign women are promiscuous, and wearing inappropriate clothing perpetuates this. You will get more respect by dressing conservatively. Covering your legs and shoulders (and even your head) is especially important when visiting temples in India. Also, avoid wearing strapless tops anywhere. If you do wear a spaghetti strap top, wear a shawl or scarf over it to be modest.
2. Don't Wear Your Shoes Inside
It's good manners to take your shoes off before entering someone's home, and it's a prerequisite before entering a temple or mosque. Indians will often wear shoes inside their homes, such as when going to the bathroom. However, these shoes are kept for domestic use and never worn outdoors. Shoes are sometimes also removed before entering a shop. If you see shoes at an entrance, it's a good idea to take yours off as well.
3. Don't Point Your Feet or Finger at People
Feet are considered to be unclean and therefore it's important to avoid pointing your feet at people or touching people or objects (particularly books) with your feet or shoes. If you accidentally do so, you should apologize straight away. Also, note that Indians will often touch their head or eyes as a show of apology. On the other hand, it's a sign of respect to bend down and touch an elder person's feet in India.
Pointing with your finger is also rude in India. If you need to point at something or someone, it's better to do so with your whole hand or thumb.
4. Don't Eat Food or Pass Objects With Your Left Hand
The left hand is considered to be unclean in India, as it's used to perform matters associated with going to the bathroom. Therefore, you should avoid your left hand coming into contact with food or any objects that you pass to people.
5. Don't Be Offended by Intrusive Questions
Indians are really inquisitive people and their culture is one where people do anything but mind their own business, often due to a lack of privacy in India and the habit of placing people in the social hierarchy. As a result, don't be surprised or offended if someone asks you how much you earn for a living and a host of other intimate questions, all upon first meeting. What's more, you should feel free to ask these type of questions in return. Rather than causing offense, the people you are conversing with will be pleased that you've taken such an interest in them! Who knows what fascinating information you'll learn as well. (If you don't feel like telling the truth to questions, it's perfectly acceptable to give a vague answer or even lie).
6. Don't Always Be Polite
The use of "please" and "thank you" are essential for good manners in western culture. However, in India, they can create unnecessary formality and, surprisingly, can even be insulting! While it's fine to thank someone who has provided a service to you, such as a shop assistant or waiter, lavishing thanks on friends or family should be avoided. In India, people view doing things for those whom they are close to as implicit in the relationship. If you thank them, they may see it as a violation of intimacy and the creation of distance that shouldn't exist.
Rather than saying thanks, it's best to show your appreciation in other ways. For example, if you're invited to someone's house for dinner, don't say, "Thank you so much for having me over and cooking for me". Instead, say, "I really enjoyed the food and spending time with you." You will also notice that "please" is used infrequently in India, especially between friends and family. In Hindi, there are three levels of formality -- intimate, familiar and polite -- depending on the form that the verb takes. There is a word for "please" in Hindi (kripya) but it's rarely used and implies doing a favor, again creating an excessive level of formality.
Another thing to keep in mind is that being polite can be viewed as a sign of weakness in India, especially if someone is trying to scam or exploit you. A meek, "No, thank you", is rarely enough to deter touts and street vendors. Instead, it's necessary to be more stern and forceful.
7. Don't Outright Decline an Invitation or Request
While it's necessary to be assertive and say "no" in some situations in India, doing so to decline an invitation or request can be considered disrespectful. This is because it's important to avoid making a person look or feel bad. This differs from the western view, where saying no is simply being upfront and not giving a false expectation of commitment. Instead of saying "no" or "I can't" directly, adopt the Indian way of replying by giving evasive answers such as "I'll try", or "maybe", or "it might be possible", or "I'll see what I can do".
8. Don't Expect People to Be Punctual
There is time, and there is "Indian Standard Time" or "Indian Stretchable Time". In the west, it's considered rude to be late, and anything more than 10 minutes requires a phone call. In India, the concept of time is flexible. People are unlikely to turn up when they say they will. 10 minutes can mean half an hour, half an hour can mean an hour, and an hour can mean indefinitely!
9. Don't Expect People to Respect Your Personal Space
Overcrowding and scarcity of resources lead to a lot of pushing and shoving in India! If there is a line, people will certainly try and jump it. To prevent this from happening, those who are in the line will commonly stand so close to each other that they're touching. It can feel unnerving at first, but it's necessary to prevent people from cutting in.
10. Don't Show Affection in Public
There's a joke that it's okay to "piss in public but not kiss in public" in India. Unfortunately, there is truth to it! While you may think nothing of holding your partner's hand in public, or even hugging or kissing them, it's not appropriate in India. Indian society is conservative, particularly the older generation. Such personal acts are associated with sex and can be considered obscene in public. "Moral policing" does occur. While it's unlikely that, as a foreigner, you'll be arrested it's best to keep affectionate gestures private.
11. Don't Overlook Your Body Language
Traditionally, women don't touch men in India when meeting and greeting them. A handshake, which is a standard western gesture, can be misinterpreted as something more intimate in India if coming from a woman. The same goes for touching a man, even just briefly on the arm, while speaking to him. While many Indian businessmen are used to shaking hands with women these days, giving a "Namaste" with both palms together is often a better alternative.
12. Don't Judge the Whole Country
Lastly, it's important to keep in mind that India is a very diverse country and a land of extreme contrasts. Each state is unique and has its own culture, and cultural norms. What may be true somewhere in India, may not be the case elsewhere. There are all kinds of different people and ways of behaving in India. Hence, you should be careful not to draw blanket conclusions about the whole country based on limited experience.